PNJ's profit decreased due to strong increase in gold price in the first quarter but lack of supply

First quarter profits down

According to PNJ's announced Q1/2025 business results, net revenue reached VND9,635 billion, down 23.5% year-on-year. Profit after tax decreased by more than 8% compared to Q1/2024 to VND678 billion. After the first 3 months of the year, the company has completed 35% of the profit plan.

In the context of weakening jewelry market purchasing power due to high gold prices and slowing overall retail market demand in March 2025, PNJ's retail jewelry revenue in the first quarter of 2025 still increased by 6.1% over the same period.

PNJ said that this positive result comes from the following factors: expanding the network and increasing the number of stores compared to the first quarter of 2024; effective marketing programs in the peak season at the beginning of the year, helping PNJ successfully attract many new customers; product strategy in line with market trends; continuing to innovate and improve service quality.

PNJ said that the company's profit decreased due to the sharp increase in gold prices in the first quarter of the year but lack of supply.

Peak sales campaigns during Tet and festivals have a positive impact on financial growth, while also forming new shopping habits and trends for consumers. New products launched during this period meet both aesthetic and storage needs, thereby helping the company partly solve the problem of raw material scarcity and optimize production capacity.

In addition, wholesale jewelry revenue in the first quarter of 2025 increased by 22.8% over the same period. With the advantage of being a reputable manufacturer, operating methodically and strictly complying with regulations, PNJ continues to affirm its position and gain the trust of customers - especially in the context of the market increasingly emphasizing transparency and traceability of products.

However, 24K gold revenue in the first quarter of this year decreased by nearly 66% compared to the same period last year. Faced with difficulties in raw materials and limited supply of 24K products lasting from the second half of 2024 until now, PNJ has proactively prioritized resource allocation for the retail jewelry segment, the company's core business.

The limitation of the number of 24K gold products has caused a significant decrease in revenue from this segment, although market demand remains high. In the context of the recent high gold price, some customers said they contacted PNJ to buy SJC gold bars and plain gold rings but were informed that they were out of stock. According to PNJ's announcement on April 18: "Currently, SJC gold bars, PNJ plain rings, and PNJ Tai Loc gold are out of stock at all PNJ stores and there is no exact information about when they will be available again."

The average gross profit margin in the first quarter of 2025 reached 21.3%, up from 17.1% in the same period of 2024, mainly due to changes in revenue structure. Specifically, the proportion of revenue from retail jewelry reached 69.3%, a sharp increase of 18.8% compared to 50.5% in the first quarter of 2024.

At the same time, PNJ continues to invest in improving production capacity and optimizing product design activities as well as sales policies, in order to flexibly meet the constantly changing needs of the market.

In the first quarter of 2025, PNJ continuously launched diverse and highly applicable collections. The company also promoted the introduction of the Mancode by PNJ brand for male customers. This strategy is considered to have the potential to attract new customer segments, with marketing activities and shopping experiences also designed completely differently, pioneering new trends in the Lifestyle retail industry.

Operating expenses (including selling expenses and administrative expenses) are optimized, decreasing by 0.3% compared to the same period in 2024. Although the number of stores and personnel increased according to the expansion plan, operating expenses are still effectively controlled, in line with the revenue growth rate of the retail jewelry segment - the segment with the highest profit margin of PNJ. As of the end of March 2025, PNJ owns 429 stores nationwide. Including 421 PNJ stores, 4 Style by PNJ stores, 3 CAO Fine Jewellery stores and 1 wholesale center.

Careful year plan

PNJ plans to hold its annual shareholders' meeting on the morning of April 26 in Ho Chi Minh City. According to the shareholders' meeting documents, in 2025, PNJ set a revenue target of VND31,607 billion, 17% lower than the same period. The target profit after tax is nearly VND1,960 billion, down 7% compared to the record level of the previous year. However, PNJ often exceeds its business plan.

PNJ stated that the jewelry industry is facing difficulties due to the scarcity of raw materials due to the increase in gold prices, while purchasing power has not recovered and the growth rate of the luxury retail industry has declined. Many gold businesses have closed, operated at a low level, and changed industries. PNJ is currently the only listed jewelry company with more than 1,000 goldsmiths, two factories and a production capacity of about four million products/year.

According to Mr. Le Tri Thong, there needs to be a clear distinction between jewelry gold and gold bars - although both are raw gold, their properties and purposes are different. However, due to pressure from exchange rates, the State has to limit gold imports, but if jewelry gold is considered a common consumer product, the demand for gold imports to produce jewelry gold is only about 1-2 billion USD/year - equal to other industries such as cosmetics.

According to Mr. Hong, due to not being able to import raw gold for many years, despite having great potential, Vietnam's gold jewelry industry is facing many difficulties.

The General Director of PNJ suggested that the State should have policies to support the gold jewelry industry, avoiding the grouping of raw gold and gold bars into one group, causing difficulties for businesses. At the same time, it is necessary to create conditions for exporting gold jewelry products, earning foreign currency for the country.

Mr. Thong said that one of the new trends in the Lifestyle retail industry is products focused on men. This can be considered a potential segment but many jewelry businesses pay little attention to it. In addition, PNJ is focusing more on the young customer segment, especially the group born in the late 90s.

Previously, in 2024, PNJ achieved net revenue of VND 37,823 billion, 14% higher than the previous year. After-tax profit reached a record high of VND 2,113 billion, up more than 7% over the same period.

With the achieved results, PNJ's Board of Directors proposed to pay dividends according to the plan of 20% in cash. Of which, the Company has provisionally paid 6% so it will pay an additional 14% in the coming time, equivalent to 473 billion VND. Regarding profit distribution, PNJ wants to allocate 40% of profits to the development investment fund, 5% to the welfare reward fund. The dividend target is maintained at 20% in cash.

Regarding the issuance of shares under the employee stock option program (ESOP), the Company plans to issue at a rate of 0.96% of the total outstanding shares, equivalent to 3.24 million shares. The preferential price is VND 20,000/share, much lower than the current level of over VND 70,000. The subjects are members of the Board of Directors, executive board, senior advisors, managers, experts and key personnel.

Also at this year's annual meeting, PNJ will have 3 members of the Board of Directors whose terms end. Therefore, the Company will elect 3 additional members Tran Ngoc Phuong Thao, Nguyen Tuan Hai and Tieu Yen Trinh to return to the Board of Directors for the 2020-2025 term.

Source: https://baodautu.vn/loi-nhuan-pnj-giam-do-gia-vang-tang-manh-quy-dau-nam-nhung-thieu-nguon-cung-d272252.html